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LAS VEGAS — Cashless gaming has been used on slot machines throughout the casino industry for at least two decades, although it wasn’t initially accepted by customers.
When the original systems, dubbed ticket-in/ticket-out, were introduced, they confused older slot players, who didn’t understand why winnings came out in the form of a ticket voucher, rather than cash, which they had originally loaded into the machine.
Everi Holdings CEO Mike Rumbolz remembers those days vividly. He was vice chairman of Casino Data Systems when the company deployed one of the earliest ticket-in/ticket-out devices.
Twenty years later, Rumbolz is leading Las Vegas-based Everi’s efforts to develop products in the cashless gaming space, one of dozens of gaming equipment providers and technology companies seeking a foothold in the now-expanding segment.
Digital Casino Machines
“The most important part is what does the customer want to do,” Rumbolz said, recalling the initial but small cashless gaming rollout. “Much like ticketing, which became ubiquitous on the casino industry floor when patrons adopted it, the casinos will add cashless when customers will accept it.”
On Thursday, the Nevada Gaming Commission will consider changes to two regulations covering the electronic transfers of money to games or gaming devices. Currently, regulations allow customers to transfer money from a debit card to a game or gaming device, but very few properties have the licensed systems in place.
Gaming Control Board Chairwoman Sandra Douglass Morgan said the language changes codify what already exists.
“The language is to confirm that a patron can use a debit card at a table or gaming device only if the transfer of money is done through a cashless wagering system,” Morgan said, adding that the system, “must be licensed and approved by the board.”
The cashless systems are also subject to additional requirements in the board’s technical standards.
Other changes include a daily monetary transfer limit and responsible gambling messages “conspicuously displayed” on devices that includes the website of the Nevada Council on Problem Gambling.
National approach
The American Gaming Association believes the time is now for cashless gaming. Last week, the Washington, D.C.-based trade organization announced a framework for allowing digital payments on casino floors, citing a study that found a majority of casino customers want the option to use cashless or digital technology for gaming.
Though the COVID-19 pandemic spurred a renewed interest in cashless gaming, the AGA has been leading an 18-month collaborative industry-wide effort to come up with a structure that covers eight principles for modernizing casino payments nationwide.
At last year’s Global Gaming Expo, AGA CEO Bill Miller said transforming the casino floor to meet with a growing digital universe would become a primary goal for the organization. Then-AGA Chairman Tim Wilmott, who retired in December as CEO of regional casino operator Penn National Gaming, said the gaming industry was “prehistoric” in the way it engaged with customers financially.
The principles cover a litany of issues, including responsible gaming, regulatory acceptance, security, choice and convenience, and public health.
Miller said cashless payment and digital technology “aligns with gaming’s role as a modern, 21st century industry and bolsters our already rigorous regulatory and responsible gaming measures.”
Gaming industry consultant Brendan Bussmann, a partner with Global Market Advisors, said the pandemic, which caused a nationwide shutdown of casinos in mid-March, should be the reason for pushing forward technology that is common in other areas of business.
“Cashless payments not only allow for a modern experience on how payments occur across every other industry around the globe but also will likely help attract more millennials back to the (casino) floor that have been cash adverse,” Bussmann said.
Omer Sattar, executive vice president of Sightline Payments, a Las Vegas-based digital payment solutions company, said the expansion of cashless gaming will create opportunities for numerous businesses.
Sattar cited how Starbucks customers pay for coffee simply by waiving the barcode from a digital wallet on their mobile phone across a QR reader at the checkout counter.
“There are probably up to five companies involved in that single transaction,” Sattar said. “No one company can provide the end-to-end process in a cashless ecosystem.”
Nevada at the forefront
Years ago, Nevada outlawed credit cards from being used directly on a slot machine.
“The credit card is the one instrument that concerns people the most,” said Rumbolz, a former Control Board chairman and a CEO for both casino operators and manufacturers. “You’re gambling with money you don’t have. But a debit card is tied to your checking account.”
Gaming equipment providers, through the Association of Gaming Manufacturers (AGEM) trade organization, are supportive of the proposed regulatory changes that will be discussed Thursday.
“As we collectively experienced over a decade ago with ticket-in/ticket-out technologies, driving the gaming environment toward a cashless environment will have profoundly positive impacts,” AGEM attorney Dan Reaser wrote in a letter submitted to the commission. “These outcomes range from enhanced legal compliance, improved public health and safety especially given the COVID-19 pandemic, as well as more robust responsible gaming alternatives and advanced operating efficiencies.”
AGEM Executive Director Marcus Prater said regulatory changes “need to start somewhere, and Nevada needs to take the lead.”
Cashless and digital systems
Everi already provides kiosks to casinos where customers can withdraw money from their debit cards directly onto a ticket voucher that can be used at a gaming table or slot machine. Customers set the amount they want to withdraw.
The company is testing a virtual wallet for casino customers, allowing players to use their mobile devices to activate slot machines. The app allows a patron to move funds from a debit card onto the platform, which can be tied to their player loyalty account.
Rumbolz said e-wallets require companies to have federally regulated money transmitter licenses overseen by the Federal Deposit Insurance Corporation (FDIC), which insures the funds on an account. Everi has obtained those approvals.
Scientific Games and other slot machine developers are also creating mobile wallets as the interest in cashless and digital technology increases. Sattar said the four slot machine manufacturers – International Game Technology, Scientific Games, Aristocrat Technologies and Konami Gaming – provide “95 percent of all the slot machines,” so the mobile wallets need to be uniform.
Rumbolz said regulations won’t be the largest stumbling block to mobile wallets finding their way onto gaming floors. Casino operators – cash-strapped by the COVID-19 shutdowns – may be apprehensive toward spending money to retrofit their games.
“For an app on your phone that transfers money directly to a gaming device requires near field technology inside a slot machine, either a Bluetooth antenna or something inside a bill validator,” Rumbolz said. “There are several ways to do it but all require an upgrade or a touching of the gaming device. Again, this is all patron-driven.”
AGA effort
Jonathan Michaels, the AGA’s vice president of strategic alliances, provided research that could convince gaming leaders to move forward. He said 57 percent of past-year casino visitors said digital or contactless payments on the casino floor is important to them because of the COVID-19 pandemic. Another 59 percent of casino customers said they were less likely to use cash in their everyday lives out of coronavirus concerns.
The primary idea behind digital payment technology was choice. Casino operators believe customers will continue to use cash. Rumbolz, despite the effort toward digital, said he believes cash won’t disappear until “we have become a completely cashless society.”
The AGA’s effort began long before COVID-19 existed. Following the legalization of sports betting in May 2018, commercial casino operators realized they needed to increase their mobile wagering capabilities.
“After sports betting, we started to see a lot more acceptance,” Michaels said. “There was a lot of discussion from groups on tools to prevent overspending by customers. There were talks about security, privacy and responsible gaming. There was a lot of interest in the industry.”
Michaels said the challenge was that in many states, payment laws were “all over the map,” with some written 20 years ago, “before online was even contemplated.” The principles, he added, came through consumer research and industry input.
Responsible gaming and regulatory reform
The No. 1 principle from the AGA is to equip customers with more tools to wager responsibly. Most of the digital options allow customers to monitor their gaming activity and set spending limits.
Digital payment platforms can provide tools to enable customers to wager responsibly. Also, the technology provides casino operators, regulators, and law enforcement increased transparency into matters of anti-money laundering and monitoring of financial transactions.
Alan Feldman, distinguished fellow for responsible gaming at the UNLV International Gaming Institute, said the technology provides “amazing tools for customers.” However, regulators should require casino operators “to turn on the tools” so that they can be used properly.
Also, digital payment technology could provide data for various research initiatives into areas problem gambling analysts have tried to understand, such as the size of the average transaction.
“There ought to be a requirement at the first two-to-five years of data be provided to an accredited research academic institution for study,” Feldman said, saying he wasn’t advocating directly for UNLV. “There is wealth of data available that give us clarity into problematic betting patterns and other harmful behaviors.”
Bussmann, the gaming consultant, said state regulators have an opportunity to create a structure that includes the proper financial and consumer protections, including meeting anti-money laundering requirements placed on casinos by The Financial Crimes Enforcement Network (FinCEN) of the United States Department of the Treasury.
“Leaders in the space both from operators and regulators will need to make sure that FinCEN standards are upheld and proper responsible gaming tools are available across all platforms,” Bussmann said. “Legislating and regulating the industry across all states and jurisdictions will be key to making the payment ecosystem seamless in working with operators, advocates, financial institutions, and other key stakeholders.”
Howard Stutz is a freelance gaming reporter for The Nevada Independent and the executive editor of CDC Gaming Reports. He has been a Nevada journalist for 30 years. He can be reached at howardmstutz@gmail.com.
The Nevada Independent is a 501(c)3 nonprofit news organization. The following people or entities mentioned in this article are financial supporters: Alan Feldman – $2,000.00.
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Introduction to Kentucky Slot Machine Casino Gambling in 2020
Kentucky slot machine casino gambling does not include games of chance, which are strictly illegal. Instead, Kentucky has competition-based electronic gaming machines at four out of its five pari-mutuel wagering racetracks.
Theoretical payout limits are not available but monthly return statistics are available for electronic gaming machines.
This post continues my weekly State-By-State Slot Machine Casino Gambling Series, an online resource dedicated to guiding slot machine casino gambler to success. Now in its third year, each weekly post reviews slots gambling in a single U.S. state, territory, or federal district.
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Relevant Legal Statutes on Gambling in Kentucky*
The minimum legal gambling age in Kentucky depends upon the gambling activity:
- Land-Based Casinos: Not available
- Poker Rooms: Not available
- Bingo: 18
- Lottery: 18
- Pari-Mutuel Wagering: 18
Kentucky’s interpretation of legal gambling requires the competitor’s level of skill “must sufficiently govern the results.”
Therefore, competition-based games are legal as well as pari-mutuel wagering. Traditional slots are illegal, including those referred to as Class III, Vegas-style, and games-of-chance slot machines.
Kentucky has competition-based electronic games available in a few of their pari-mutuel facilities. These skill-based games are anonymously-based historical race results.
Historically, Kentucky has had a fascinating relationship with gambling. While casino gambling was never legal, gambling dens were prevalent before the Great Depression of 1929. To this day, the open display of illegal gambling from that time in American history continues to negatively affect the perception of gaming in Kentucky.
If you’re ever in Newport, directly across the Ohio River from Cincinnati, consider walking the Newport Gangster Tour.
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*The purpose of this section is to inform the public of state gambling laws and how the laws might apply to various forms of gaming. It is not legal advice.
Slot Machine Private Ownership in Kentucky
In Kentucky, it is legal to own a slot machine privately.
Gaming Control Board in Kentucky
Digital Gambling Machines
The Kentucky Horse Racing Commission (KHRC) regulates skill-based games at pari-mutual racetracks in the Commonwealth of Kentucky.
These devices are Historic Horse Racing (HHR) electronic gaming machines. The KHRC reports Kentucky offers 2,981 HHR machines.
Casinos in Kentucky
There are five pari-mutuel racetracks in the Commonwealth of Kentucky. Of these, only four sites offer skill-based HHR electronic gaming machines.
The largest casino in Kentucky is Derby City Gaming with 1,000 HHR gaming machines.
The second-largest casino is Red Mile Gaming & Racing, an HHR parlor in partnership with Keeneland Race Course, with 938 gaming machines.
Commercial Casinos in Kentucky
The four out of five of Kentucky’s pari-mutuel racetracks with skill-based HHR electronic gaming machines are:
- Derby City Gaming in Louisville located 74 miles west of Lexington on the Indiana border.
- Ellis Park Racing and Gaming in Henderson located 105 miles northwest of Bowling Green.
- Kentucky Downs Gaming in Franklin located 29 miles south of Bowling Green.
- Red Mile Gaming & Racing in Lexington.
Tribal Casinos in Kentucky
The Commonwealth of Kentucky has no federally-recognized American Indian tribes and, therefore, no tribal casinos.
Other Gambling Establishments
As an alternative to enjoying Kentucky slot machine casino gambling, consider exploring casino options in a nearby state. Bordering Kentucky is:
- North: Indiana and Ohio Slots
- East: West Virginia Slots
- Southeast: Virginia Slots
- South: Tennessee Slots
- West: Missouri Slots
Each link above will take you to my blog for that neighboring U.S. state to Kentucky.
Our Kentucky Slots Facebook Group
Are you interested in sharing and learning with other slots enthusiasts in Kentucky? If so, join our new Kentucky slots community on Facebook. All you’ll need is a Facebook profile to join this closed Facebook Group freely.
There, you’ll be able to privately share your slots experiences as well as chat with players about slots gambling in Kentucky. Join us!
Payout Returns in Kentucky
The Commonwealth of Kentucky does not offer any theoretical payout limits for their competition-based HHR gaming machines.
The Kentucky Horse Racing Commission offers statistics for HHR gaming under Quick Links entitled Wagering on Historical Horse Races. Its December 2019 report indirectly offers actual return statistics including comparisons to past actuals.
To calculate a player’s win percentage from the report, divide Less: Return to Public by Total Handle. For December 2019, the monthly Player’s Win% for HHR machines were:
- State-wide: 91.5%
- Derby City: 90.9%
- Ellis Park: 93.9%
- Keeneland/Red Mile: 91.3%
- Kentucky Downs: 92.0%
From this December 2019 report, Ellis Park had the highest player win% at nearly 94% while Derby City had the lowest at nearly 91%.
Summary of Kentucky Slot Machine Casino Gambling in 2020
Kentucky slot machine casino gambling exists as competition-based, games-of-skill Historical Horse Racing (HHR) electronic gaming machines instead of games-of-chance slot machines.
No minimum or maximum theoretical payout limits have been set. Monthly return statistics are publicly available for each pari-mutuel racetrack with HHR games.
Annual Progress in Kentucky Slot Machine Casino Gambling
In the last year, Kentucky increased its HHR machines by 9% to 2,981 devices. However, the average daily handle for HHRs increased by 46%. For 2020 so far, it’s an amazing 59% increase compared to 2019.
Other State-By-State Articles from Professor Slots
- Previous: Kansas Slot Machine Casino Gambling
- Next: Louisiana Slot Machine Casino Gambling
Have fun, be safe, and make good choices!
By Jon H. Friedl, Jr. Ph.D., President
Jon Friedl, LLC